NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on the climate crisis makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

Friday, November 30, 2018

Last 4 Years Are The Hottest 4 Years

The year 2018 is on course to be the fourth warmest on record, according to the World Meteorological Organization…[T]he 20 warmest years on record have been in the past 22 years, with the 2015-2018 making up the top four…[and if the trend continues, temperatures may rise by 3-5C by 2100…The temperature rise for 2018 of 0.98C comes from five independently maintained global data sets…[2018’s La Niña has held the warming down but] a weak El Niño is expected to form in early 2019 which might make next year warmer than this one…

…[Increasing sea level rise, ocean acidification and glacier melt are evidence that] the long-term warming trend has continued in 2018…The WMO report says that for the most recent decade, 2009-2018, the average temperature increase was 0.93C above the pre-industrial baseline which is defined as being between 1850-1900. For the past five years, the average was 1.04C…Scientists involved in preparing the [WMO] report say that [2018’s flooding in Asia and heatwaves and wildfires in Europe and the US show how] the fingerprint of climate change can now be more clearly seen…” click here for more

Sub-Sahara Africa Needs Skilled New Energy Builders

“The distributed renewable energy (DRE) sector, necessary in a world with millions of people without power, is being held back by a chronic shortage of skilled workers…Sub-Saharan Africa (excluding South Africa) has just 16,000 people working in renewable energy in a region with 600 million un-electrified people, according to [the Power For All coalition…[Backed by Schneider Electric Foundation and The Rockefeller Foundation, the coalition is working to address the growing shortage of job-ready talent] across the DRE value chain, including manufacturing and assembly, sales, marketing and financing, and installation and services. It’s an especially big problem in remote, rural areas where lack of energy access gaps and joblessness are most severe…

…[In-market competency shortages are among the] main business challenges…Sub-Saharan Africa will be a key focus of the [coalition because it] has the biggest energy access gaps, the fewest trained workers and the biggest opportunity to use DRE to spur clean energy and new jobs, especially in rural areas…[The International Renewable Energy Agency (IRENA) has] estimated that off-grid renewables for energy access could create at least 4.5 million jobs by 2030…Vocational training will become an essential part of the off-grid and decentralised energy revolution…[The coalition] will conduct an annual energy access jobs survey to understand current employment, job growth trends, and to identify gaps in workforce formation…The first findings will be released in H1 2019…” click here for more

UK’s Solar Village On Shuttered Coal Site

“…French firm Engie said it had decided against selling off the Rugeley site in Staffordshire and would instead build super-efficient houses on the 139-hectare site as part of its bid to “move beyond energy”…Half of the energy required by the new homes will come from green sources, predominantly solar, which will be fitted on rooftops, in a field and even floating on a lake…The company is planning for 10 megawatts of solar capacity in total, equivalent to one of the UK’s smaller solar farms…Batteries will be used across the site, both in homes and at a communal power storage facility, to balance out electricity supply and demand…[The homes] will use nearly a third less energy than average new builds. Heating will come not from gas boilers but electric devices…

There are seven operational coal power stations left in the UK, but all are due to shut by a government deadline of 2025, raising questions over what happens to the sizeable parcels of land afterwards…While some energy companies are hoping to build gas plants on or adjacent to the old coal sites, others will need to be decommissioned for uses…Engie said it was eyeing other sites around the country…[It says all] large scale housing developments going forward are going to have some form of local generation…Around 30% of the Rugeley project will be classified affordable homes, though it is not clear how much the green energy measures and high building standards will add to the upfront cost of the properties…” click here for more

“…[The National Rifle Association's take-no-prisoners approach to gun control] has been ruthlessly successful…[It is] time for climate activists, businesses harmed by global warming, and everyone else who cares about the fate of the Earth and future generations to take a page from the NRA playbook…[A climate superlobby is] needed to convince a still-doubtful segment of the public, mobilize voters, strong-arm recalcitrant lawmakers — and, perhaps most important, raise the money necessary to make all of this happen…It's a heavy lift to hammer out cooperation among the nation's Balkanized environmental groups and regulation-averse corporate interests. But what's happening now isn't working. And time is running out…[Industries hurt by climate change — including insurance and re-insurance, health care, agriculture, recreation and real estate] stand to lose tens of billions if even moderate climate change occurs…A climate superlobby could draw on tens of millions…The reality is that when the NRA speaks, Washington listens. There's no reason the save-the-planet movement can't carry that kind of clout.” click here for more

More and more Democrats are committing to supporting a sweeping, historic green effort that would transform the U.S. economy in an effort to fight climate change, in the latest indicator that environmental issues will be a dominant force in 2019…[The Sunrise Movement], a climate group led by young people, said at least 15 Democrats are willing to sign onto supporting the formation of a select committee to create a “Green New Deal” endorsed by Rep.-elect Alexandria Ocasio-Cortez (D-NY)…[S]enior party members have since the midterms voiced their support for urgent climate action. Rep. John Lewis (D-GA) quickly gave a Green New Deal his support the week before Thanksgiving, handing activists a major win. In the time since, the list of backers has grown…

Increasingly, the Green New Deal is becoming a litmus test for Democrats grappling with a massive shift in the party…[Many progressive newcomers] have taken the unusual step of highlighting climate issues, which rarely garner significant attention from either party…[the draft Green New Deal bill establishes a select committee with the authority to create a “detailed national, industrial, economic mobilization plan” allowing the United States to swiftly become carbon-neutral…Calling for input from business and labor along with state and local governments, the draft nonetheless gives a timeline of no more than a decade for the deal’s execution…Creating jobs is a core element of the plan, but the deal also emphasizes “social, economic, racial, regional, and gender-based justice and equality” in any final draft…” click here for more

“…[The Fourth National Climate Assessment, Volume II, a congressionally-mandated report from 13 federal agencies] detailing the impacts of climate change across the United States, shows] the clear and present danger that human-caused climate change poses to the American people, especially to communities of color, the elderly and rural communities…[It shows transitioning] from fossil fuels to renewable energy sources will reduce the risks of climate impacts…A certain amount of warming is likely “locked in” so adaptation is required. The faster the U.S. reduces emissions, the less risk the country faces and cheaper adaptation will be.

Editor’s note: Community solar continues to slowly, quietly move into new markets.

Utilities like big solar projects that they can own, and consumers like rooftop solar that they can own, but there is a third kind of solar emerging that may finally be ready to work for both utilities and consumers. Community solar projects are interconnected with utilities’ distribution systems in ways that give utilities the same control they get with larger projects. But they are owned or leased by individual customers like rooftop solar. And they are big enough to get economies of scale that make them more affordable than rooftop solar. Community solar has been held back by the complexities that come with being the right choice for everybody. But recent growth shows it may have begun to resolve those complexities.

The appeal is clear. Community solar's installed U.S. capacity grew 112%, from 387 MW at the end of 2016 to 734 MW at the end of 2017, according to a report released May 1 from the Smart Electric Power Alliance (SEPA) and the Coalition for Community Solar Access (CCSA). This includes utility administered projects in 33 states and private developer-administered projects in 19 states. The potential market is huge as it includes all electricity customers without solar-suitable roofs or the financial status or inclination to contract for or own it. The National Renewable Energy Laboratory in 2015 estimated the potential market at between 32% to 49% of the projected 2020 overall 5.5 GW to 11 GW distributed solar market, representing between $8.2 billion and $16.3 billion in cumulative investment. Community solar’s rapid recent growth shows that potential can become real. Utilities are beginning to understand its system benefits. Financial backers are starting to appreciate its value. And SEPA and CCSA are beginning to standardize policy and make the new concept more familiar to customers… click here for more

Editor’s note: The turmoil created by California’s new customer choice organizations continues to simmer but the state has wildfires distracting it.

California’s regulators see a disruption coming that may not be exactly like the 2000-2001 energy crisis, but could have bigger, wider impacts. The customer choice movement has added dozens of new power providers into the mix. Their inexperience and uncertain place in the regulatory scheme threatens the ability of regulators and policymakers to keep the state's focus on growing clean energy and cutting emissions. Some say it even threatens the state power system's reliability and affordability. Leaders of the customer choice movement sees a plan already in place to prevent another crisis and says current challenges do not stem from the expanding choice movement.

In 1998, after major legislative changes, California shifted its investor-owned utilities (IOUs) into a competitive retail market. It worked until the summer of 2000, when a “perfect storm” of factors drove the wholesale electricity price from Spring 1998’s $40/MWh to $250/MWh at the end of 2000. The IOUs lost an estimated $12 billion to $14 billion. Pacific Gas and Electric (PG&E) declared bankruptcy. Only efforts by the CPUC saved Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E). Total costs reached an estimated $40 billion to $45 billion. Many of the factors that drove the crisis no longer apply. But major legislative changes opening up the power sector to competitive forces are once again being imposed and the market is in turmoil… click here for more

Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison have developed a new framework for customer rates that reflects the changing dynamics of the electric power industry and customer choice and continues to “ensure that everyone in California has access to safe, reliable and affordable energy.”1 The framework, called Modern Rate Architecture, is based on four key principles:

Transparency: Bills need to separate out actual utility products from the costs to meet state-mandated policy programs, so customers understand what they are paying for.

Equity: Rates must be fair and minimize costs caused by one customer group from being shifted to other groups, while recognizing that customers use the grid, consume products and pay their bills in different ways.

Sustainability: The new framework should be forward-looking and malleable so that it can accommodate new products, services, and business models and help California achieve its goals at a reasonable cost.

Access: Customers should have equal access to the many options to manage their energy services.

Modern Rate Architecture enables California’s three investorowned utilities to be effective change agents and stewards for the state’s ambitious climate and environmental goals, which Californians support. It is a framework that enables flexibility for retail rate structures and allows IOU customers to understand that their electricity choices can make a difference to California’s success.

The authors, and the IOUs we represent, offer Modern Rate Architecture as a starting point for discussions on how to best provide a robust pricing paradigm for the twenty-first century.

The energy industry in California is in a period of transformation as government policies, customer interest and technology innovation are transforming it to support a more environmentally sustainable future.

There are more options for electricity customers, who have both increased access to advanced technologies, such as rooftop solar, energy storage and electric vehicles, and increased flexibility to choose their providers. Today though, because of an outdated rate structure, some customers have access to the choices and subsidies provided by these changes, while other customers are paying their subsidies – shifting costs from one group to another.

This rate structure threatens California’s ability to meet its clean energy goals by creating inefficient markets and inaccurate incentives for customers. California’s IOUs need to be able to set rates to meet state policy objectives, including new contracts for renewable energy supply, cost-effective energy storage paired with renewables, and updated infrastructure for grid automation and millions of EVs.

For more than a decade, the California Public Utilities Commission, the state legislature and the IOUs have been trying to address rate design in the context of the changing grid. However, these efforts have yielded less than optimal results or have not been integrated with an overarching strategic vision.

The CPUC’s recent report, “California Customer Choice: An Evaluation of the Regulatory Framework Options for an Evolving Electricity Market,” issued in August 2018, states, “California needs a clear long-term vision for its regulatory framework to address the state’s system requirements and policy goals beyond short-term fixes to stabilize immediate issues.” The IOUs believe this need for a clear vision extends to pricing.

Modern Rate Architecture is a framework for rates that reflects the new realities of the utility business in California. This framework supports the collective mission of the CPUC, the state legislature, and the IOUs to “ensure that everyone in California has access to safe, reliable and affordable energy.”2

The Philosophy behind Modern Rate

Architecture Modern Rate Architecture clarifies how costs are allocated and paid for. With this clarity, customers will be able to understand which costs are rising and what is being achieved in return, enabling transparent discussions about value and priorities. Customers who get credits for helping to lower carbon emissions, increasing energy efficiency, or driving EVs should understand the relationship between their actions and their rewards, helping encourage behavior that supports California goals.

Modern Rate Architecture:

1. Identifies and sets clear prices for the utilities’ product, which is the delivery of electricity, and services, such as billing, customer support, and emergency response;

2. Recognizes the costs and benefits of policy mandates;

3. Charges customers appropriately for products, services and policies; and

4. Creates transparent credits to compensate customers for benefits they provide to others or the overall energy system.

The existing rate structure was developed for the vertically integrated electricity model that served us for most of the history of electric utilities, and it has been altered iteratively and reactively to meet new challenges. Twenty-first century customers, who are being offered new technologies, new business models, and state policies meant to drive greenhouse gas reductions would be better served with a newly conceived rate architecture that addresses their realities.

Policy goals, customer engagement, and technology trends have encouraged the emergence of an increasingly decentralized landscape of consumers, retailers, and suppliers who engage with the electricity system in divergent ways, expect different levels of service and find value in distinct products and services.

By 2018, more than three-quarters of a million rooftop solar customers in California IOU territories displace much of their energy usage and do not pay their full share for grid services. In the burgeoning Community Choice Aggregation (CCA) movement, new providers procure power for a growing number of customers but leave behind some of the costs for power previously contracted on their behalf. The savings from these programs motivate more customers to join in.

Under the current rate structure, these customers can also avoid paying some or all of the societal and policy-related costs that are mandated to be recovered in a utility’s rate. Ultimately, this cycle will impact affordability for all remaining customers – many of whom lack access to CCAs or rooftop solar.

Being fair to each of these customers, while not shifting costs between them requires a new approach. An October 11, 2018 decision from the CPUC to revise the departing load charge for CCA customers is a positive one-off decision that begins to address cost shifts. However, a holistic approach to rate architecture is still needed.

Current Pricing Framework

Under the current rate structure utilities calculate their revenue requirement by tracking the costs of all products and services, including a return on investments.3 This revenue requirement is then allocated to customer classes, as determined by customer type, usage, demand and voltage levels.4 In the Residential class, customer service and grid service-related costs are generally recovered through volumetric rates (rates charged on a cent per kilowatt hour basis).

This reliance on recovering all costs through volumetric rates fails to recover appropriate costs from each customer: lower-usage customers may pay less and higher-usage customers may pay more than the cost to serve them. This issue is specific to the California IOUs’ residential customers, as rates for other California customer classes are a mix of fixed and volumetric rates. Volumetric energy rates are not the sole basis for residential rate design outside of California.

Safe and Reliable Service: Delivering safe and reliable electric service (including both power resources and grid capacity) to all customers in the service territory regardless of their current service provider or changing grid needs.

Policy Mandates: Legislative and regulatory mandates including the Renewables Portfolio Standard, low-income and disadvantaged community programs and energy-efficiency initiatives.

Customer Choice: Off ering customers more control over their energy decisions.

The current rate structure was not designed to balance these competing priorities. Cost pressures could force regulators and stakeholders to choose which priority to favor, creating inequities. Th is undermines the IOUs’ obligation to provide services to all customers at an aff ordable and equitable cost.

For example, a residential customer may choose to charge her new EV during off -peak times, increasing her home usage above average. Th rough the rates paid for home usage, this customer may already be paying her fair share of societal program and grid costs. But, by also adding these costs to her EV charging bill she is, in a sense, double paying – and these costs reduce the competitiveness of electricity versus gasoline. Meanwhile, her neighbor who has a rooftop solar system but no EV pays no costs for societal programs, thus increasing the burden to pay on the EV-owning neighbor with no solar panels.

Modern Rate Architecture is based on four key principles that are consistent with the goals of current rate policies (Figure 2).

Transparency is providing clearly defi ned and trackable costs, benefi ts, credits, subsidies and charges. Transparency allows customers to see the costs of programs and initiatives they are supporting and to make better-informed choices about the direct costs and benefi ts of technology, electricity consumption, and energy sources.

Increasing transparency provides a clear, sustainable path to assess fairness. Transparent rates will aid policymakers in assessing the eff ectiveness of programs and facilitate future decision-making. Transparent subsidies will also make it easier for the marketplace to determine the costs and benefi ts of taking some action or adopting a technology.

Equity is ensuring all customers pay for the cost of the utility services they receive and that all customers have equal incentives to change behavior or invest in technology. Where policy mandates provide subsidies that eff ect equity, such as those to improve aff ordability for low-income customers and customers in disadvantaged communities, or for the advancement of clean energy policy, these should be transparent.

Sustainability is establishing a framework that is forwardlooking and malleable. It provides clear and accurate price signals that can accommodate new products, services and business models and will help California achieve its goals at a reasonable cost.

Sustainability looks at policy mandates that require investments to be collected over decades and ensures that all customers who benefit from these programs are paying for them. This means no customers pass costs that were incurred on their behalf to other customers (with an exception for the low-income and disadvantaged community subsidies discussed above, which are the result of an explicit societal commitment). It also will be a tool for California to directly implement, moderate and eventually eliminate programs and subsidies that have fulfilled their goals.

Access is ensuring all customers can take advantage of the opportunities that are part of the state’s clean energy future, including access to solar and storage technologies and to a competitive marketplace that customers or their providers can enter and exit.

Modern Rate Architecture based on these four principles will allow for the holistic creation of a rate structure that can not only respond to today’s markets but is also flexible enough to be adjusted in the future as technology evolves so that customers can benefit from even more choices. Applying these principles can enable ongoing appraisals of affordability in the context of the cost and benefits of various policies.

Modern Rate Architecture meets the design criterion for transparency, and will demonstrate whether the rates are providing equity, sustainability and access to all customers. There are four critical components to Modern Rate Architecture:

Product Differentiation and Unbundling – Modern Rate Architecture clearly identifies products and services and their costs.

California IOUs currently provide products such as electricity generation and delivery, traditional customer services, and implementation of public policy mandates. These should be broken out individually or in groups as rate and billing components so that customers understand what they are being charged for.

Some components, such as energy, might be offered by third parties and not by the regulated utility. In those cases, Modern Rate Architecture allows for a direct price comparison between third-party and IOU rates, so customers and the marketplace can make informed choices.

Once products, services, and mandates are separated, each customer will better be able to understand how their specific costs and credits are bundled into their total bill.

Meeting Needs of Different Customer Types – Modern Rate Architecture recognizes the significant differences in customers’ energy needs, and in how costs and benefits of policy mandates are allocated.

In today’s rate structure, customers are segmented based on what type of customer they are (residential, agricultural, commercial, etc.), and then, in some cases, by how much electricity they use (small, medium and large commercial and industrial). This segmentation worked when nearly all services were provided by vertically-integrated utilities and the primary focus of ratemaking was to charge customers within each class the average cost of service for that class.

Residential customers now have choices, but the volumetric rate structure fails to reflect this. With Modern Rate Architecture, customers can be segmented by how they use electric services and, potentially, how they would like to receive and pay for such services. Customers with similar cost profiles – for example, CCA customers, rooftop solar owners, EV drivers – could be grouped together. They would be charged more accurately for the products and services they use, so that they pay neither more nor less than their fair share. Customers who do not use services should not pay, and customers who contribute products and services to the grid should receive appropriate credits.

Pricing Utility Services and Policy Mandates – Modern Rate Architecture identifies and prices the costs of utility services, while also distinguishing the costs of policy mandates.

The goals of pricing are to signal to customers how much and when to use electricity and to charge customers transparently and accurately for services they receive. The costs of conventional utility services (electricity generation, electricity delivery and customer services) vary by customer and, logically, there should be a different pricing structure for the different types of services.

Modern Rate Architecture establishes a cost-based price for utility services, eliminating the unintended consequences of rates that are not tied to costs. Rates that are too low or too high compared to the costs to deliver the service send the wrong signals to customers – for instance, encouraging customers with rooftop solar panels to use more electricity, or pushing customers with hybrid vehicles to choose gasoline over electricity to fuel their cars.

The costs of policy mandates should be unbundled from the utility products and services, so customers can differentiate and respond accordingly. Policy-related costs are necessary to drive towards the state’s carbon reduction goals and must be equitably allocated to customers to pay their fair share. Pricing, credits, and policy costs should be clarified so that customers understand.

Providing clear and direct costs and credits for policy mandates will allow for efficient achievement of such goals. The California Solar Initiative is an example of a policy program that got it right: Recipients received clearly defined rebates for installing solar, which declined in steps as more capacity was installed across the system. The declining incentives were intended to help the program meet its goal of creating a self-sustaining solar industry by reducing rebates as the industry grew and were phased out when the goal was met (see CSI General Market Program at CPUC.ca.gov).

Transparent Credits and Compensation to Customers – Modern Rate Architecture compensates for benefits provided and can incentivize behaviors that support goals.

Pricing for services is distinguished from credits for benefits either from customer contributions (for example, energy efficiency, demand response or rooftop solar) or state policies (for example, net energy metering). Customers see appropriate price signals for the costs of services they receive and receive transparent benefits for actions that help achieve policy goals or reduce utility costs. This also provides alternative service providers with clear price signals for the costs of utility service.

Currently, customers might not realize they are getting a credit or appreciate the size of the credit relative to their bill because credits can be embedded in the total or bundled pricing.

This lack of transparency creates two problems. First, it can incentivize the wrong behavior. Customers lack visibility into their true costs and thus do not modify behaviors in line with the originally intended signals. For example, artificially high bundled prices may cause some customers to not charge hybrid EVs. Conversely, customers may conserve energy at times when there is an abundance of clean and low-priced renewable energy. Second, customers may not understand why their bills are increasing when the credit declines or expires.

The latter is especially true for credits designed to incentivize investment in new technologies. In such cases, the incentive should decline and eventually expire as adoption increases and cost structures improve, following the successful model of the California Solar Initiative. While market transformation policy objectives are critical, excessive subsidization can lead to uneconomic behavior and continued burden on non-participants.

What Does Modern Rate Architecture Achieve?

With Modern Rate Architecture, bills should accurately and clearly represent each customers’ costs, credits and contributions to state policy mandates (Figure 3).

Starting with a Clean Slate

Establishing rate structures using the four principles we describe allows us to correct the underlying causes of existing inequities. Modern Rate Architecture will be fl exible enough to accommodate innovation and can more directly incentivize customers to adopt clean-energy technologies and behaviors. Importantly, Modern Rate Architecture will allow stakeholders to manage equity and aff ordability pressures.

Working as Partners

Th e CPUC and other stakeholders acknowledge many of the issues addressed by Modern Rate Architecture and are looking for solutions. Th e CPUC has made progress over the last fi ve years to address systemic design fl aws in residential rates and continues to explore and resolve questions of how best to allocate credits and benefi ts in other proceedings.

Addressing California’s Vision

Modern Rate Architecture fosters continued progress toward the state’s vision of access to safe, reliable and aff ordable energy. It supports the state’s continued position as a leader in climate change resilience, greenhouse gas reduction, technology adoption and forward-looking legislative policy. Moreover, Modern Rate Architecture can make clear that doing the right thing – taking actions that have societal benefits – is rewarded.

“…[The Fourth National Climate Assessment, Volume II, a congressionally-mandated report from 13 federal agencies] detailing the impacts of climate change across the United States, shows] the clear and present danger that human-caused climate change poses to the American people, especially to communities of color, the elderly and rural communities…[It shows there] is no credible alternative to greenhouse gasses to explain the warming…Temperatures have risen 1.8°F since 1901, and all of that warming (plus some) is due to human activity…Globally, 16 of the last 17 years are the warmest years on record…The planet has 1.1°F of warming locked in, even if emissions were to drop to zero in the short term.

…Economic losses from climate change could reach hundreds of billions of dollars annually, for some sectors. Climate impacts along the coastlines are exacerbating existing social inequities. Communities face difficult questions regarding who will pay for current impacts and future adaptation strategies and if, how, or when to relocate vulnerable communities…The Southeast is expected to lose over a half-billion labor hours by 2100 due to extreme heat…Agricultural crop quality and quantity is projected to decline across the U.S. due to increased flooding, temperatures, drought and other climatic changes...In the Midwest, corn crop yields could decrease by up to 25 percent by mid-century...The economic value of timber is expected to decrease by up to $788 billion by the end of the century due to changes in forest composition…In 2010, heat stress was estimated to have lowered annual U.S. dairy production by $1.2 billion…Global warming and acidifying oceans are already harming the $200 billion fishing sector…” click here for more

“…[The Fourth National Climate Assessment, Volume II, a congressionally-mandated report from 13 federal agencies] detailing the impacts of climate change across the United States, shows] the clear and present danger that human-caused climate change poses to the American people, especially to communities of color, the elderly and rural communities…[It shows climate change doubled the area burned by wildfires across the West between 1984 and 2015. By 2100, annual acreage burned could increase by as much as 6 times. Historically, the U.S. has spent an average of $1 billion a year to fight wildfires. In the first eight months of 2017, costs exceeded $2 billion…Rising temperatures are reducing snow-to-rain ratios, leading to significant differences between the timing of water supply and demand…[and] Atlantic hurricane activity has increased…

Climate change is upsetting coastal ecosystems, threatening fisheries, the tourism industry, public safety, and human health. Continuing coastal impacts will worsen existing social inequities as vulnerable communities reckon with adaptation…Sea levels have risen 8-9 inches since 1880, three inches of which have occurred since 1990. As much as 8 feet of sea level rise is possible by 2100 if greenhouse gas pollution is left unchecked…Even with adaptation measures, billions to hundreds of billions of dollars of additional damages are expected by 2100. Lasting damage to personal property and infrastructure will lead to financial losses and higher insurance premiums…” click here for more

Monday, November 26, 2018

TODAY’S STUDY: A Complete New Energy Approach

June 2018 (Energy and Environment Economics for the California Energy Commission Energy Research and Development Division)

Abstract

This project evaluates long-term energy scenarios in California through 2050 using the California PATHWAYS model. These scenarios investigate options and costs to achieve a 40 percent reduction in greenhouse gas emissions by 2030 and an 80 percent reduction in greenhouse gas emissions by 2050, relative to 1990 levels.

Ten mitigation scenarios are evaluated, each designed to achieve the state’s greenhouse gas reduction goals subject to a changing California climate. All mitigation scenarios are characterized by high levels of energy efficiency and conservation, renewable electricity generation, and transportation electrification.

The mitigation scenarios differ in their assumptions about biofuels and building electrification, among other variations. The High Electrification scenario is found to be one of the lower-cost and lower-risk mitigation scenarios, subject to uncertainties in building retrofit costs as well as implementation challenges.

This research highlights the pivotal role of the consumer in meeting the state’s climate goals. To achieve high levels of adoption of electric vehicles, energy efficiency and electrification in buildings, near-term action is necessary to avoid costly replacement of long-lived equipment in 10-15 years. Furthermore, market transformation is essential to reduce the capital cost of electric vehicles and heat pumps.

This project evaluates long-term energy scenarios through 2050 using a techno-economic model known as the California PATHWAYS model. These scenarios investigate options and costs for California in a changing climate to achieve a mandated 40 percent reduction in greenhouse gas (GHGs) emissions by 2030, and an 80 percent reduction in GHGs by 2050, relative to 1990 levels.

In 2017, California extended the state’s Cap-and-Trade Program through 2030 (Assembly Bill 398, Garcia. Chapter 135. Statutes of 2017). The carbon price resulting from the Cap-and-Trade Program will help improve the economics of low-carbon alternatives, yet it is not clear whether the carbon price on its own will be sufficient to close the gap between emissions reductions achieved through current policies and the 2030 GHG target. The scenarios investigated in this research suggest that additional upfront cost incentives or subsidies, technological breakthroughs, and business and policy innovations may be required. While this research does not specifically address the role of cap and trade in meeting the state’s climate goals, it highlights the physical transformations of the state’s energy economy that is necessary and the challenges in accomplishing that transformation for new equipment sales, megawatts of renewable energy procured, and the production of zero-carbon fuels.

Project Purpose

This project advances the understanding of what is required for technology deployment and other GHG mitigation strategies if California is to meet its long-term climate goals. This research provides researchers and policy makers with information about key choices that could lower the costs of meeting the state’s GHG reduction goals. Moreover, this analysis incorporates and evaluates the implications of the expected impacts of climate change on the electricity system through 2050 to inform California’s Fourth Climate Change Assessment. This research addresses the key questions:

• What are the priority, near-term strategies in the areas of scaling-up deployment, market transformation and reach technologies needed to achieve California’s 2030 and 2050 GHG reduction goals?

• What are the risks to, and potential cost implications of, meeting the state’s GHG goals if key mitigation strategies are not as successful as hoped?

Long-term energy scenarios through 2050 are analyzed using the California PATHWAYS model, an economy wide, technology-specific scenario tool developed by Energy and Environmental Economics (E3) from 2009 through the present. The PATHWAYS scenarios leverage prior research and analysis from other state energy agencies and from E3, building upon and expanding E3’s prior work.

These scenarios use the latest research from the University of California Irvine (EPC-14-074) with results providing the expected impacts of climate change on the electricity sector through 2050. These results specifically show a lower average availability of hydroelectric generation available to California and higher average temperatures, which result in lower heating demands in buildings and higher air-conditioning demands.

In addition, researchers use a least-cost capacity expansion dispatch model, E3’s Renewable Energy Solutions Model (RESOLVE), to test the impact of the PATHWAYS scenarios on the California electricity grid. The RESOLVE model evaluates least-cost capacity expansion options for the California electricity sector and generation dispatch solutions through 2050 using the PATHWAYS scenario results of an electricity sector greenhouse gas constraint and a set of electricity demands. The modeled geography represents the entire state (with simplified assumptions in the rest of the Western Interconnection) through 2050.

Key changes to these scenarios, relative to E3’s prior work, include updated technology and fuel cost assumptions, with lower cost trajectories for renewable electricity, energy storage and electric vehicles, and updated cost assumptions for alternative fuel trucking technologies. The analysis also includes a lower base case assumption about the consumer cost of capital. In addition, most scenarios consider a biofuels-constrained future, whereby only biomass waste and residues are available to produce biofuels from within the United States. Purpose-grown crops are excluded from these scenarios because of the potential emissions from indirect landuse change. In these scenarios, biofuel production efficiencies and costs do not change over time, resulting in relatively limited and high-cost biofuels.

• A “Senate Bill 350” scenario, which reflects the impact of SB 350 (De León, Chapter 547, Statutes 2015, which requires a 50 percent Renewables Portfolio Standard by 2030 and a doubling of energy efficiency savings relative to historical goals), as well as other policies that were in place as of 2016, including vehicle electrification and reductions in short-lived climate pollutants by 2030

• “Mitigation” scenarios are evaluated which meet the state’s 2030 and 2050 GHG goals using different combinations of greenhouse gas reduction strategies. The “High Electrification” scenario is one of the ten mitigation scenarios evaluated, which meets the state’s climate goals using a plausible combination of greenhouse mitigation technologies.

Scenarios test the impact of over- or underperformance on key technology deployment trajectories to assess potential cost risks, and to identify priority areas for near-term action for deployment, market transformation, and “reach” technologies that may be required to meet the 2050 greenhouse gas target. A reach technology is a technology not widely commercialized today but has been demonstrated outside of laboratory conditions and has the potential to mitigate emissions from sectors that are currently difficult to address. Ten mitigation scenarios are developed in total to help identify which strategies are most critical to meeting the state’s 2030 and 2050 greenhouse gas goals. These scenarios are used to identify key technology risks and to evaluate the robustness of the state’s climate mitigation strategies if one strategy does not deliver greenhouse gas reductions as expected.

The report focuses on the High Electrification scenario, which is one of the lower-cost, lowerrisk mitigation scenarios. This scenario includes high levels of energy efficiency and conservation, renewable electricity, and electrification of buildings and transportation, with reliance on biomethane in the pipeline to serve mainly industrial end uses. The High Electrification scenario assumes a transition of the state’s buildings from using natural gas to low-carbon electricity for heating demands. This transition presents a suite of implementation challenges including uncertain feasibility and costs of retrofitting the state’s existing building stock, equity and distributional cost impacts, as well as consumer acceptance.

Achieving California’s climate goals will fundamentally transform the state’s energy economy, requiring high levels of energy efficiency and conservation, electrification of vehicles, zerocarbon fuels and reductions in non-combustion greenhouse gases. Meeting the state’s 2030 climate goals requires scaling up and using technologies already in the market such as energy efficiency and renewables, while pursing aggressive market transformation of new technologies that have not yet been utilized at scale in California (for example, zero-emission vehicles and electric heat pumps). In addition, at least one “reach” technology that has not been commercially proven will likely be necessary to help meet the 2050 greenhouse gas goal, and to mitigate the risk of other greenhouse gas reduction solutions falling short.

To achieve high levels of consumer adoption of zero-carbon technologies, particularly of electric vehicles and energy efficiency and electric heat in buildings, market transformation is needed to bring down the capital cost and to increase the range of options available. Market transformation can be facilitated by:

1. Higher carbon prices, such as those created by the state’s cap and trade and low-carbon fuel standard programs, which reduce the cost differential between low-carbon fuels and fossil fuels.

2. Codes and standards, regulations and direct incentives, to reduce the upfront cost to the customer.

3. Business and policy innovations, to make zero-carbon technology options the cheaper, preferred solution compared to the fossil fueled alternative.

Table 1 summarizes the key strategies identified through this research that should be prioritized for scaled-up use, market transformation, and as “reach” technologies that may be crucial to meet the 2050 greenhouse gas target.

High Electrification Scenario Direct Costs Compared to the Reference Scenario

The net cost of transforming the state’s energy economy to a low-carbon system is relatively small. Fuel savings from reduced consumption of gasoline, diesel and natural gas help offset the higher capital costs associated with low-carbon technologies. The estimated 2030 total direct cost, (excluding health and climate benefits), to meet the state’s climate goals range from a savings of $2 billion per year to net costs of $17 billion per year, with a base case result of $9 billion per year in 2030. This amount is less than the recovery costs associated with one large natural disaster, such as the recent 2017 wildfires in Northern California. Put differently, the estimated 2030 cost of reducing statewide greenhouse gas emissions by 40 percent is likely to range from a savings of 0.1 percent to costs of 0.5 percent of California’s gross state product, and the societal benefits of the GHG reductions achieved are likely to outweigh these costs. For example, in other studies, the estimated health benefits associated with reducing GHG emissions, and thus improving air quality, have been estimated to exceed these direct costs.

The upfront capital cost investment, however, is still significant, and is spread across both businesses and households – some of which have better access to low-cost capital than others. Long-term fuel savings, or even lifecycle cost savings, may not convince businesses and households to make the switch to new technologies with which they have little experience. A key challenge is convincing millions of households and businesses to adopt these technologies and become the drivers of change to a low-carbon economy.

Finally, this study aggregates statewide costs and benefits, explicitly excluding the effect of state incentives and in-state transfers, such as Cap-and-Trade, the Low Carbon Fuel Standard, and utility energy efficiency programs. Costs borne by individual households will differ from the average and will depend on policy implementation. Further research could investigate the cost implications of specific state policies on individuals and businesses.

Uncertainty in Scenario Analysis

While these models produce numerically precise results, the long-term greenhouse gas reduction scenarios resulting from the modeling are neither predictions nor forecasts of the future. Several key assumptions, however, could change this study’s findings about the High Electrification scenario as one of the lower-cost, lower-risk decarbonization pathways. First, biofuels could be available at lower cost than modeled here, particularly if sustainability concerns with purpose-grown crops are addressed, or if other jurisdictions continue to lag California in decarbonizing their economies and so do not rely on advanced biofuels, resulting in more of the global biofuel supply being available to California. Second, high costs associated with retrofitting existing buildings for electric heating could significantly increase the cost of the High Electrification scenario. This scenario assumes that building electrification could proceed in California without requiring costly early retirement of end-use equipment, and without creating cost equity impacts for natural gas customers which must be mitigated. These assumptions deserve further research and inquiry.

This research has evaluated options for meeting the state’s economywide climate goals, including assessing the potential effects on and implications for the electricity sector. This research provides decision-makers and researchers with information about the cost implications and emissions tradeoffs between different greenhouse gas mitigation strategies focusing on 2030 versus those focusing on 2050, and it highlights the pivotal role of the consumer to help meet the state’s climate goals.

Furthermore, this research has helped fund the development of widely used energy and electricity sector planning tools, including the California PATHWAYS model and the electricity sector capacity expansion and dispatch RESOLVE model. These energy and electricity planning tools have been, and continued to be, used by many California state agencies to provide unique insights into how the electricity system may evolve during the next 15 to 30 years to achieve state goals.

The benefits of this project and research will continue to expand as future projects build on this work and through ongoing research and policy discussions within and outside California on how to achieve deep reductions in greenhouse gas emissions.

“…[The Fourth National Climate Assessment, Volume II, a congressionally-mandated report from 13 federal agencies] detailing the impacts of climate change across the United States, shows] the clear and present danger that human-caused climate change poses to the American people, especially to communities of color, the elderly and rural communities…[It also] shows unequivocally that rapid transition away from fossil fuels is necessary to save lives and preserve the country’s natural heritage… The Trump administration denies climate change and is overtly hostile to climate science…[The president] admitted recently to dismissing that report when it was presented to him…

“…Volume I, released last year, assessed the existing body of climate change science…[Volume II] provides the technical, scientific assessment of impacts, risks, and adaptation… [It finds that human] activity, such as burning fossil fuels, is the primary cause for the warming temperatures…Climate change is already costing Americans, as storms become more damaging, heat waves more deadly, wildfires more common, allergies worse and some diseases more widespread…Fighting climate change will save hundreds of billions of dollars in public health costs alone, and save thousands of lives a year…The Department of Defense, farmers, businesses, and local communities are already planning for and adapting to climate impacts. But their plans often do not always account for the uncertainty that is inherent to a changing climate…” click here for more

“…[The Fourth National Climate Assessment, Volume II, a congressionally-mandated report from 13 federal agencies] detailing the impacts of climate change across the United States, shows] the clear and present danger that human-caused climate change poses to the American people, especially to communities of color, the elderly and rural communities…[It also shows the] health of every person living in the U.S. is at risk from climate change. Communities of color, the elderly, children, and low-income communities are particularly vulnerable…Allergy-induced conditions like hay fever and asthma are becoming more frequent and severe…

Warming is expanding the range of mosquitoes and ticks that carry vector-borne diseases like Zika, West Nile, Dengue, Chikungunya and Yellow Fever…Drier conditions in Arizona and California have led to greater growth of the fungus that leads to Valley Fever (coccidioidomycosis). Before 1999, cryptococcal infections were limited to the tropics, but Cryptococcus gatti, the species that causes these infections, is now established in Northwest soil…The Midwest is projected to have the largest increase in heat-related premature deaths by the end of the century - an additional 2,000 deaths per year…West Nile cases are projected to double by 2050, with a $1 billion annual price tag in hospital costs and premature deaths…” click here for more

Saturday, November 24, 2018

The President’s Fire-Fighting Strategy

The Many Causes Of California Infernos

Poor forest management is, indeed, a part of the problem, but it didn't lead to human devastation before masses of people moved to the wilderness's edge and did not prepare for the worst. And then the climate started changing... From PBS NewsHour via YouTube

Thursday, November 22, 2018

The Turkey Song

NewEnergyNews is so grateful to so many…beginning with the Marks family foundation… the blessed cowgirls of Carousel Ranch… the enduring Randolph and the Scott clan… the always inspiring guys of Akbar…the inimitable Frenchie and her Juliette…the Cowboy Country and Cowboy Palace dancers…the yellow rose of Teri…and the staff at ,Utility Dive…

Can’t forget the hard working people who regulate and run utilities and grid systems and keep the lights on…the policymakers, innovators, and builders working to harvest the power of this good earth’s wind, sun, deep heat, and flowing waters, for sharing themselves and stories from the front lines of the fight to build a New Energy world…And, of course, the especially astute readers who keep clicking on this page…

May you always count your blessings and may a kind fate lead you to the pot of gold at the end of the rainbow…

ORIGINAL REPORTING: The Challenge In Properly Valuing Solar

Editor’s note: The debate about solar’s value and how it should be compensated continues at state commissions across the country.

A large disparity in two new solar valuation studies demands explanation. Studies of the value of solar and of distributed energy resources (DER) attempt to quantify their benefits and costs. They have been pivotal, but not decisive, in net energy metering (NEM) debates. A solar valuation study is intended to quantify the cost or benefit each solar owner's array brings to the system. It is calculated in the same volumetric terms as rates, allowing the value to be expressed as a rate of compensation for solar-generated electricity exported to the grid by the solar array owner. Depending on the variables used in the calculation, it may come out above or below the retail rate of system power.

A March 29 study for Northwestern Energy of its Montana territory showed BTM solar’s levelized 25-year value to be between $0.035/kWh and $0.046/kWh. An April 10 draft study done for Maryland’s Public Service Commission (PSC) showed BTM solar’s 2019 value in the state’s investor-owned utility (IOU) territories to be between about $0.31/kWh and about $0.41/kWh. That's about an 88% difference, but the sun is not 88% brighter in Maryland than in Montana. The biggest single difference impacting these numbers is that the most recent average retail price of electricity for Montana is $0.088/kWh and $0.122/kWh for Maryland. A comparison of these studies shines some light on solar valuation methodologies and best practices. One thing is as clear as the light of day: If these studies stand, the future of Maryland’s solar industry is probably much brighter than the future of Montana’s solar industry… click here for more

Editor’s note: Announcements on the East and West Coasts since this story ran promise huge growth for offshore wind over the next decade.

Building wind turbines to operate in harsh ocean conditions costs more and takes longer than building on land. The permitting process can be rigorous and lengthy. Construction requires special vessels and equipment and interconnection requires subsea engineering. But Estimating the Value of Offshore Wind Along the United States' Eastern Coast" from Lawrence Berkeley National Laboratory (LBNL) suggests the value of OSW makes it, in many locations adjacent to energy-hungry cities along the East Coast, a better bet than onshore wind. Considering an energy resource's full economic value along with its cost is common. Nuclear, coal and rooftop solar advocates insist those resources' values justify policy supports and incentives. This is the first time OSW's values have been rigorously quantified, and the LBNL researchers found they can be substantial…

LBNL provides the first rigorous assessment of OSW's economic value on the eastern seaboard. The data shows how the value varied by location, by season, and by time of day between 2007 and 2016. It also discusses the drivers that caused the energy, capacity and renewable energy credit (REC) values to vary. The analysis "provides important insights" for energy policymakers considering offshore-specific incentive programs and mandates," LBNL reports. But it does not "estimate the economic value or cost of other community, economic development, and environmental effects," LBNL acknowledges. Which is why one offshore wind developer told Utility Dive policymakers who want to take advantage of the resource need a more complete accounting of its value… click here for more

Plug-in Hybrids: The Cars that will ReCharge America by Sherry Boschert: "Smart companies plan ahead and try to be the first to adopt new technology that will give them a competitive advantage. That’s what Toyota and Honda did with hybrids, and now they’re sitting pretty. Whichever company is first to bring a good plug-in hybrid to market will not only change their fortune but change the world."

Oil On The Brain; Adventures from the Pump to the Pipeline by Lisa Margonelli: "Spills are one of the costs of oil consumption that don’t appear at the pump. [Oil consultant Dagmar Schmidt Erkin]’s data shows that 120 million gallons of oil were spilled in inland waters between 1985 and 2003. From that she calculates that between 1980 and 2003, pipelines spilled 27 gallons of oil for every billion “ton miles” of oil they transported, while barges and tankers spilled around 15 gallons and trucks spilled 37 gallons. (A ton of oil is 294 gallons. If you ship a ton of oil for one mile you have one ton mile.) Right now the United States ships about 900 billion ton miles of oil and oil products per year."

NOTEWORTHY IN THE MEDIA:
NewEnergyNews would welcome any media-saavy volunteer who would like to re-develop this section of the page. Announcements and reviews of film, television, radio and music related to energy and environmental issues are welcome.

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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